Calculations for “Lower costs, real outcomes”

We’ve said that the money you save with TIAA could add a lot to your quality of life—including travel, text books, personal training, home security and even a half year of your daily cup of joe. Here’s a breakdown of the math we used to arrive at these estimates.

Save $25,000 = 5 trips around the world

What we told you

At retirement, the average person could save more than $25,000 over 30 years by investing in TIAA’s low-cost mutual funds and variable annuities. That’s enough for 5 round-trip tickets around the world.

How we calculated it

This hypothetical scenario assumes:

A 6% return on an annual contribution of $3,000 to a retirement savings account such as a 401(k), 403(b), or IRA for a thirty-year period.

A cost of $5,000 for a round-trip ticket around the world (Source: AirTreks.com).

If the rate of return, contribution amount, or the cost of a round-trip ticket around the world were to change, results would vary from those shown.

Please note: This is a hypothetical example for illustrative purposes only and does not represent any particular investment, nor does it account for inflation. There may be other material differences between investment products that must be considered prior to investing. This example is not intended to predict or project returns. Investment performance is not guaranteed and accounts may lose value.

Save $5,000 = Textbooks for 4 years of college

What we told you

If you have a 529 college savings plan with investments in TIAA’s low cost funds, you could potentially save $5,000 or more over 18 years. That’s enough to pay for 4 years of textbooks.

How we calculated it

This hypothetical scenario assumes:

A 6% return on an annual contribution of $2,000 per year to a 529 education savings plan for an 18-year period.

An average cost for college textbooks for the 2015-2016 school year of approximately $1,250 per year (Source: The College Board).

If the rate of return or the cost of textbooks were to change, results would vary from those shown.

Please note: This is a hypothetical example for illustrative purposes only and does not represent any particular investment, nor does it account for inflation. There may be other material differences between investment products that must be considered prior to investing. This example is not intended to predict or project returns. Investment performance is not guaranteed and accounts may lose value.

Save $5,000 = Weekly personal training for a year

What we told you

Each year, the average TIAA customer could save more than $5,000 by taking advantage of our free, personalized, fund-level retirement advice. That’s enough for a year of personal training sessions.

How we calculated it

This hypothetical scenario assumes:

A consumer receiving investment advice from an independent financial advisor, who may on average charge clients 1% of assets to administer a portfolio (Source: Forbes).

If this consumer has $500,000 in investable assets, they would therefore pay $5,000 a year to receive the type-of fund level advice that TIAA’s financial consultants can provide at no additional cost as part of TIAA’s in-plan retirement offerings.

According to the National Strength and Conditioning Association, personal trainers cost an average of $50 per hour with a range of $15 to $100 per hour, although prices vary by region and may be higher in urban cities.

Save over $300 = half a year of coffee breaks

What we told you

Enjoy more of life’s small pleasures when you avoid checking account and ATM fees with TIAA Direct® and save over $300 a year. That’s enough for 6 months of coffee breaks.

How we calculated it

This hypothetical scenario assumes:

A TIAA Direct interest checking account can save you about $324/year, because the account:

Charges no account maintenance fees – compared to the industry average of $12/month, or $144/year, a consumer may face (Source: Bankrate.com).

Charges no fee for using an out-of-network ATM and reimburses customers up to $15 per month for U.S. ATM usage fees or $180 a year.

An average cost for a cup of coffee in the US of $2.70 (Source: U.S. News).

Therefore, the consumer in this hypothetical scenario could afford to buy 5 cups of coffee during the work week for just over 6 months.